IMF approves Georgian economic policy
20 January, 2011
IMF approves Georgian economic policy

The International Finance Corporation of World Bank approved Georgian economic policy of 2010 and disbursed a new USD 153 million-worth loan to Georgia.
Georgian government eagerly announced by the end of 2010 that the economic growth exceeded the forecasted 2% by 4% by the end-year of 2010, and the budgetary deficit shrunk from 9.2% of 2009 to 6% in 2010.  Government swears that the economic growth will go ahead in 2011 and targets at much hopeful macro-economic figures.
Georgian economic

analysts do not share the optimism of government however. They think the economic growth is rather caused by inflation than bigger economic activity of the country.
“The inflation rate stands at 11% officially, while everybody knows that it is much higher in fact,” Davit Narmania, Director Executive of the Institute of Caucasus Economic and Social Research, told Georgian Journal. “Besides this 6% of economic growth is preliminary assessment, the real figure will be drawn out after the entire yearly data will be summarized.”
According to Levan Kalandadze, Director Executive of Association of Georgian Small and Medium Enterprises, the 6% growth of GDP happened thanks to inflation and increased state expenses implemented in infrastructure projects mainly not thanks to robust business activity that remains still sluggish.
“GDP includes both imported and locally produced products, it does not reflect the real local business productivity,” he said.
But the International Monetary Fund (IMF) approves the economic policy of Georgia. It completed the seventh and eighth reviews of Georgia’s economic performance under a Stand-By Arrangement (SBA) for an amount of about USD1 billion [extended until June 14, 2011] and disbursed a USD 153 million loan to the country.
The authorities indicated that they do not intend to draw the USD 153 million loan that became available to Georgia after the completion of the seventh and eight reviews.
According to Murilo Portugal, Deputy Managing Director and Acting Chair of IMF based on the steady implementation of the program’s economic policies, Georgia’s economic recovery has strengthened, as evidenced by better-than-expected growth and the stabilization of the exchange rate. The authorities’ economic policies, focused on tighter monetary and fiscal policies and exchange rate flexibility, will lay the groundwork for achieving macroeconomic stability and growth based on private sector financing and investment. While short-term risks to growth appear balanced, significant downside medium-term external risks remain, related in particular to the uncertainty surrounding the recovery in private capital inflows, including Foreign Direct Investments (FDI).
“The budget for 2011, which provides for a further reduction of the deficit of about 2 ½ percent of GDP, is consistent with the authorities’ objective of reestablishing fiscal sustainability. The authorities’ commitment to cap expenditure in 2011 is commendable, as is their decision to introduce an escape clause in the constitutional amendment subjecting tax increases to a referendum. This clause will provide the authorities with more flexibility in implementing the consolidation efforts necessary over the medium term,” Portugal said on January 12, 2011.
He belies that  the recent increase in the policy rate and the decision to tighten reserve requirements will help to bring down inflation in 2011 however authorities should stand ready to tighten monetary policy further to persist inflationary pressures. Moreover, to rebuild net international reserves exchange rate flexibility should remain an anchor of the authorities’ economic strategy.
The IMF approves Georgian banking sector’s high levels of capital that provides adequate buffers against adverse shocks, but finds critical to keep the close supervision of banks.
“As announced by the authorities, it is also important to continue tightening the regulatory framework as financial sector stability solidifies,” the IMF paper reads.

Other Stories
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equivalent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange